Guess who isn’t getting a tax break in 2018—the medical technology industry

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January 02, 2018

The 2.3% excise tax on medical device sales that was suspended in 2015 is back as of yesterday. The tax, which was imposed in 2013 to partially fund the Affordable Care Act, aka Obamacare, has been roundly opposed by the medical technology industry and legislators on both sides of the political aisle. The failure of the Republican-controlled legislature to repeal Obamacare paved the way for its reinstatement.

As reported in PlasticsToday in August 2017, “The medical device industry, through its associations and lobbying groups, has tarred the tax as a job killer and obstacle to research and development. In a report published in January 2015, industry association AdvaMed claimed that the tax was responsible for 18,500 job losses and would result in 20,500 fewer employees being hired over the next five years. Its impact on innovation is largely a result of the tax being applied to sales, not profits, thus disproportionately hurting small startup companies.”

Supporters of the tax say it has helped provide health insurance to millions of previously uninsured Americans, reports Reuters. Critics, who have vowed to keep fighting the levy, say it has stifled the medical industry and slashed jobs, adds the news agency.

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